US Sherwin-Williams expects choppy H1, sees signs of consumer weakness

HOUSTON (ICIS)–Sherwin-Williams expects demand during the first half of 2025 will remain choppy while the company waits for what it expects will be an inevitable inflexion point for demand for its products, the US-based paints and coatings producer said on Tuesday.

“The single largest variable heading into next year is the timing and pacing of a true inflexion in the demand environment,” said Heidi Petz, CEO. She made her comments during an earnings conference call. “It is only a question of when, not if.”

Until that inflexion comes, Sherwin-Williams expects demand will remain choppy.

During the third quarter, demand from consumers undertaking do-it-yourself (DIY) improvement projects remained soft, a trend also noted by RPM International, a company that makes coatings, adhesives and sealants.

Sherwin-Williams attributed the softness for its DIY products to weaken existing home sales and inflation.

For auto refinish products, insurance claims have fallen because consumers are reluctant to pay deductibles to get their vehicles repaired after accidents, Petz said.

PPG also noted a decline in insurance claims.

Near term, Sherwin-Williams warned about the possibility that its industrial customers could undergo extend holiday shutdowns.

The company did not provide more details.

However, US-based paints and coatings producer PPG did note that automobile original equipment manufacturers (OEMs) started taking unscheduled and prolonged downtime in the third quarter, and the trend should continue in the fourth quarter.

DEMAND FROM HURRICANE REPAIRS
Hurricanes initially lower demand because they shut down paint stores and customers cannot immediately return to work.

Ultimately, demand does rise after customers assess damage and pursue insurance claims.

After about four weeks, demand for primers increases, Sherwin-Williams said. Sundries and paint then follow.

Forecasting the effects of Hurricanes Helene and Milton are difficult because they hit weeks apart in the third and fourth quarters.

TALK OF RENOVATION RESURGENCE
Longer term, the US could see a resurgence of home renovation projects, said Jim Jaye, senior vice president of investor relations.

One of the economic indicators tracked by Sherwin-Williams is the Leading Indicator of Remodeling Activity (LIRA), which is published by the Joint Center for Housing Studies of Harvard University.

According to LIRA, spending for improvements and repairs on homes should expand once again by the middle of 2025.

Economic growth, expected declines in inflation and higher home equity could encourage homeowners to undertake repairs and remodeling, he said.

Paints and coatings are important end markets for many petrochemicals and resins.

Titanium dioxide (TiO2) is used as a white pigment and to make paints opaque.

Solvents used in paints and coatings include ethyl acetate (etac), butyl acetate (butac) and methyl ethyl ketone (MEK).

Polyurethane coatings are made with polyols and isocyanates such as methyl diphenyl diisocyanate (MDI). Acrylic based coatings are made with methyl methacrylate (MMA), and epoxy coatings are made with epoxy resins.

Other chemicals used in paints and coatings include isopropanol (IPA) and vinyl acetate monomer (VAM).

Thumbnail shows paint, one of the products made by Sherwin-Williams. Image by Oleksandr Latkun/imageBROKER/Shutterstock.